I just received notice from Calif. Fran. Tax Board that I owe tax/penalties from 1996. Is it possible to broker a deal?

The Franchise Tax Board will abate penalties for reasonable cause. You would need more than just not being in CA for 10 years to meet this burden. In most (read pretty much all) cases interest will not be abated. You can also submit an offer in compromise, or request a payment plan. Your finances will be considered for both of these plans to determine if you qualify. You need to contact the FTB and start a dialogue. If you do not feel comfortable doing this you can retain a tax professional.

Disclaimer: This response does not constitute legal, accounting or other professional advice. Only through a personal, confidential consultation with qualified legal counsel can anyone properly evaluate their own unique estate planning challenges and determine what, if any, appropriate legal strategies and tactics should be implemented to meet those challenges.

Circular 230 Disclaimer: “Nothing in this response is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same.”

If a significant amount is involved you would be well served to retain an attorney or an enrolled agent who has a proven track record with the CFTB.